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, Notice 2014-46

1.5 cents per kilowatt-hour (kWh) for the sale of

is available at ,

electricity produced by you;

and Notice 2015-25 is available at

1/2 of 1.5 cents for open-loop biomass, small irrigation,

2015-13_IRB/ar17.html.

landfill gas, trash, hydropower, and marine and

Resources means wind, closed-loop biomass, open-loop

hydrokinetic renewable facilities;

biomass, geothermal energy, solar energy, small irrigation

$4.375 per ton for the sale of refined coal produced; or

power, municipal solid waste, hydropower production,

$2 per ton for the sale of Indian coal produced.

marine and hydrokinetic renewables, refined coal, and

The credit for electricity produced is proportionately

Indian coal.

phased out over a 3-cent range when the reference price

Closed-loop biomass is any organic material from a

exceeds the 8-cent threshold price. The refined coal credit

plant that is planted exclusively for use at a qualified

is proportionately phased out over an $8.75 range when

facility to produce electricity.

the reference price of fuel used as feedstock exceeds 1.7

times the 2002 reference price. The 1.5-cent credit rate,

Open-loop biomass is solid, nonhazardous, cellulosic

the 8-cent threshold price, the $4.375 refined coal rate,

waste material; lignin material; or agricultural livestock

the reference price of fuel used as a feedstock, and the $2

waste nutrients as defined in section 45(c)(3). See Notice

Indian coal rate are adjusted for inflation. The reference

2008-60, 2008-30 I.R.B. 178, for rules related to

price and the inflation adjustment factor (IAF) for each

open-loop biomass, including an expanded definition of a

calendar year are published during the year in the Federal

qualified facility and rules related to sales.

price (adjusted by the IAF), there is no reduction. For

Geothermal energy is energy derived from a

electricity produced, if the reference price is more than 3

geothermal deposit as defined by section 613(e)(2).

cents over the adjusted threshold price, there is no credit;

Small irrigation power is power generated without

if the reference price is more than the threshold price, but

any dam or impoundment of water. See section 45(c)(5).

not more than 3 cents over the adjusted threshold price,

there is a phaseout adjustment on line 16. For refined coal

Municipal solid waste is solid waste as defined under

produced, if the reference price is more than $8.75 over

paragraph 27 of 42 U.S.C. 6903. Municipal solid waste

the adjusted threshold price, there is no credit; if the

doesn't include paper which is commonly recycled and

reference price is more than the threshold price, but not

which has been segregated from other solid waste (as so

more than $8.75 over the adjusted threshold price, there

defined).

is a phaseout adjustment on line 19.

Refined coal is a liquid, gaseous, or solid fuel

Credit rates. For calendar year 2015, the effective credit

produced from coal or high carbon fly ash meeting the

rate for electricity, refined coal, and Indian coal produced

requirements of section 45(c)(7). See Notice 2010-54 for

and sold is, respectively, 2.3 cents per kWh, $6.710 per

additional information on refined coal facilities. Notice

ton, and $2.354; there is no phaseout adjustment.

2010-54 is available at

2010-40_IRB/ar07.html.

Example. If the reference price of electricity is 10.0¢

and the adjusted threshold price is 9.0¢, reduce the credit

Hydropower production means the incremental

by 1/3 ((10.0¢ – 9.0¢) ÷ 3¢ = .3333). Enter the line 15

hydropower production for the tax year from any

credit in the first entry space on line 16, .3333 in the

hydroelectric dam placed in service on or before August 8,

second entry space, and multiply to figure the reduction.

2005, and the hydropower production from any

nonhydroelectric dam described in section 45(c)(8)(C).

Definitions

Marine and hydrokinetic renewable energy means

Construction of a Qualified Facility

energy derived from waves, tides, and currents in oceans,

Two methods can be used to establish that construction of

estuaries, and tidal areas; free flowing water in rivers,

a qualified facility has begun.

lakes, and streams; free flowing water in an irrigation

system, canal, or other man-made channel, including

1. Physical Work Method starts when physical work

projects that utilize nonmechanical structures to

of a significant nature begins. See section 4 of Notice

accelerate the flow of water for electric power production

2013-29 and section 3 of Notice 2014-46 for details; or

purposes; or differentials in ocean temperature (ocean

2. Safe Harbor Method meets the requirements

thermal energy conversion). See section 45(c)(10)(B) for

provided in section 5 of Notice 2013-29, as modified by

exceptions.

section 5 of Notice 2014-46.

Indian coal means coal which is produced from coal

Although both methods can be used, only one method is

reserves which on June 14, 2005, were owned by an

needed to establish that construction of a qualified facility

Indian tribe or held in trust by the United States for the

has begun.

benefit of an Indian tribe or its members.

For more information, see Notice 2013-29, 2013-20

Qualified Facilities

I.R.B. 1085, as clarified by Notice 2013-60, 2013-42 I.R.B.

A qualified facility is any of the following facilities owned

431. These notices are clarified and modified by Notice

by you and used to produce electricity or, in the case of

2014-46, 2014-36 I.R.B. 520 and all are updated by

coal production facilities, refined and Indian coal.

Notice 2015-25, 2015-13 I.R.B. 814, or any successor.

Notice 2013-29 is available at

Wind facility placed in service after October 22, 2004,

2013-20_IRB/ar09.html, Notice 2013-60 is available at

and the construction of which begins before January 1,

-2-

Instructions for Form 8835 (2015)

Instructions For Form 8835 - Renewable Electricity, Refined Coal, And Indian Coal Production Credit - 2015 Page 2

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